How to calculate what overtime is worth to you?
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JustAnotherSaver
Posts: 6,709 Forumite
and without getting picky, by worth i mean what exact amount of money will be earned (net) from the hours done.
I don't get a salary, i don't do a set amount of hours (one week i could do 47, the next i could do 62 & the rest could be anywhere in between in 15 minute increments), my pay varies constantly due to this.
I've often wondered what a set amount of hours overtime would be worth to me. For example...
By Friday let's say i've worked 45 hours. Let's also assume i've got the weekend off but i offer to do 5 hours. What that extra 5hrs would get me in the pocket (after tax and Nat Ins) and how to calculate that so i can work it out with any pay rises we may get.
We get paid an overtime rate for anything after 40.00hrs, so from 40.15hrs we're on a higher rate of pay.
So in the case above, i'll have done 40 hours at basic pay, 5 hours at overtime rate and then i've offered to do a further 5 hours.
For example sake, let's say the overtime rate of pay is £10.00.
So yes it would get me £50 but then tax and NI would need to come off this. I'm a BR tax payer.
How would i calculate this?
I don't get a salary, i don't do a set amount of hours (one week i could do 47, the next i could do 62 & the rest could be anywhere in between in 15 minute increments), my pay varies constantly due to this.
I've often wondered what a set amount of hours overtime would be worth to me. For example...
By Friday let's say i've worked 45 hours. Let's also assume i've got the weekend off but i offer to do 5 hours. What that extra 5hrs would get me in the pocket (after tax and Nat Ins) and how to calculate that so i can work it out with any pay rises we may get.
We get paid an overtime rate for anything after 40.00hrs, so from 40.15hrs we're on a higher rate of pay.
So in the case above, i'll have done 40 hours at basic pay, 5 hours at overtime rate and then i've offered to do a further 5 hours.
For example sake, let's say the overtime rate of pay is £10.00.
So yes it would get me £50 but then tax and NI would need to come off this. I'm a BR tax payer.
How would i calculate this?
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Comments
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Have a look at the tools avaialable at https://www.thesalarycalculator.co.uk/salary.php - they should prove useful. However, bear in mind that since your hours vary week by week, you'll need to take the results as a guide only...0
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If you have done a full week, its probably best to assume that your tax free allowances and NI threshold have been used up. So any additional earnings will be at the marginal rate.
Take 20% for tax and 12% for NI off any overtime, you will receive 68% in your hand - for 5 hours overtime at £10 per hour you will receive £34 on top of your normal weekly wageMortgage = [STRIKE]£113,495 (May 2009)[/STRIKE] £67462.74 Jun 20190 -
JustAnotherSaver wrote: »and without getting picky, by worth i mean what exact amount of money will be earned (net) from the hours done.
You have to get picky because it depends on a number of variable, including pay periods and rates of pay.
I don't get a salary, i don't do a set amount of hours (one week i could do 47, the next i could do 62 & the rest could be anywhere in between in 15 minute increments), my pay varies constantly due to this.
that helps a bit because there is a min per week paid
I've often wondered what a set amount of hours overtime would be worth to me. For example...
By Friday let's say i've worked 45 hours. Let's also assume i've got the weekend off but i offer to do 5 hours. What that extra 5hrs would get me in the pocket (after tax and Nat Ins) and how to calculate that so i can work it out with any pay rises we may get.
still not enough info but now you have only worked 45 house above you said the min was 47.
We get paid an overtime rate for anything after 40.00hrs, so from 40.15hrs we're on a higher rate of pay.
So in the case above, i'll have done 40 hours at basic pay, 5 hours at overtime rate and then i've offered to do a further 5 hours.
For example sake, let's say the overtime rate of pay is £10.00.
So yes it would get me £50 but then tax and NI would need to come off this. I'm a BR tax payer.
How would i calculate this?
The base calculation on the example is 20% tax and 12% NI.
At some point the tax goes upto 40% and the NI comes down to 2% but may not be at the same time
unlikely with a base on 47hours of around £24k.0 -
Take a 1/3 off and you won't be far away.0
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JustAnotherSaver wrote: »a
I don't get a salary, i don't do a set amount of hours (one week i could do 47, the next i could do 62 & the rest could be anywhere in between in 15 minute increments), my pay varies constantly due to this.
I hope you have signed an opt-out from the 48-hour working week provision of the WTRs.0 -
The reason i put that in there was for the unfunny people of the board who spend all their time not answering a question straight. I could see it coming a mile off if i didn't put that opening line in....getmore4less wrote: »You have to get picky because it depends on a number of variable, including pay periods and rates of pay..
"overtime is worth nothing to me because once i've done my time i like to spend time at home with my family". Like yeah nice one, great answer :T So the reason i put it in there was to try and do away with the comedians.
I really do wish people wouldn't be so finicky.getmore4less wrote: »still not enough info but now you have only worked 45 house above you said the min was 47. .
It's pretty obvious my whole post with the hours and the rate of pay were just 'for examples sake' to try and get towards a formula that is used.
I would find it difficult to believe that the method of calculation would be different for someone doing 45 hours to someone doing 47 hours. Sure the amount in the pocket would differ but the method of calculation? I struggle to believe that it would differ so what does the specifics of the example matter? If i had said 10 hours per week then i could understand your point because then i'd probably come under some kind of tax / national insurance allowance so the method of calculation would be different, but at 45 or 47 or 55 or 60 or 70 etc hours i've used up all my allowance i would guess.
Which is why i said i'm a BR tax payer - to save people from wasting time talking about higher rate tax payers.getmore4less wrote: »At some point the tax goes upto 40% and the NI comes down to 2% but may not be at the same time
unlikely with a base on 47hours of around £24k.0 -
If we didn't opt out of the 48 hour working week we probably wouldn't be able to afford to feed ourselves :rotfl:General_Grant wrote: »I hope you have signed an opt-out from the 48-hour working week provision of the WTRs.0 -
As well as tax and NI do you have a percentage going to a pension? That will need to be included in the calculation if you are interested in money in your pocket, rather than financial benefit you are gaining.But a banker, engaged at enormous expense,Had the whole of their cash in his care.
Lewis Carroll0 -
You'll probably think I'm being picky, but ...
You said you were a BR taxpayer. Does that mean your tax code is BR, or that your earnings are low enough not to go into the higher rate of tax?
It does make a difference: someone pointed out that your tax-free allowance would be used up on your non-overtime hours, but if your tax code is BR then you're not being given a tax-free allowance, so ALL your earnings have income tax deducted.Signature removed for peace of mind0 -
I forgot about this. Yes i pay the minimum percentage. I would pay more but my employer will only pay the minimum anyway so the 'more' bit that i do pay goes in to my SIPP instead.theoretica wrote: »As well as tax and NI do you have a percentage going to a pension? That will need to be included in the calculation if you are interested in money in your pocket, rather than financial benefit you are gaining.
So how would you calculate it now then?
No no, actually in this case i don't think you're being picky at all as now you've mentioned it i've realised there is a BR tax code so it's a fair question.You'll probably think I'm being picky, but ...
You said you were a BR taxpayer. Does that mean your tax code is BR, or that your earnings are low enough not to go into the higher rate of tax?
It does make a difference: someone pointed out that your tax-free allowance would be used up on your non-overtime hours, but if your tax code is BR then you're not being given a tax-free allowance, so ALL your earnings have income tax deducted.
Thing is i come on here and i see abbreviations all day long and sometimes they baffle me senseless. So i get in to the habit of trying to abbreviate things also.
I meant Basic Rate tax payer as in i earn about 24k tops. 23 i think it was last year, give or take a little.0
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